MicroStrategy Likely to Sell $400 Million Worth of Corporate Bonds for Its Next Bitcoin Purchase

Business intelligence firm MicroStrategy is keen on continuing its Bitcoin buying spree. On Monday, June 7, the firm announced that it considering a $400 million sale of its corporate bonds and borrowing this money to buy additional Bitcoins.

The firm’s announcement comes Bitcoin has been reeling under pressure over the last couple of weeks. It looks like MicroStrategy is willing to do the bottom fishing during this market correction. At press time, Bitcoin (BTC) is down more than 10% and trading at $32,778 with a market cap of $613 billion.

MicroStrategy currently holds more than 92,000 Bitcoins currently in its treasury. This comes with the company’s aggressive buying and accumulation policy over the last ten months. In the latest announcement, the could software company said that it will be floating new subsidiary called MacroStrategy to hold all of its Bitcoins.

If MicroStrategy gets a go-ahead for its $400 million corporate bond sale, it will be able to purchase nearly 12,000 Bitcoins in this price. This is not the first time that MicroStrategy has been making bond sales. The company has conducted previous bond sales for senior convertible notes. With its new bond sale, the company is looking to issue secured notes that will mature in 2028.

By seeking corporate bonds, companies can buy debt for their business with the promise that they will return the amount along with the principle and the interest. It looks as if the business intelligence firm is pretty confident that the BTC price will continue to increase going ahead.

However, the Bloomberg report notes that MicroStrategy’s latest offering is 23% higher than the company's total operating cash flow since 2016. Some market analysts argue that this $400 million of debt isn’t being used for the company’s growth or acquisition purposes, rather it’s being used to speculate on a volatile asset class.

During the recent market correction, MicroStrategy announced multiple Bitcoin purchases but in a phased manner. MicroStrategy’s Michael Saylor has been one of the leading advocates of Bitcoin and has been heavily pushing for institutional participation in Bitcoin.

As said the company has 92,000 bitcoins in its kitty acquired over the last ten months at an average price of $24,450 per token and total invested value going at $2.25 billion.